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UPDATE: GE Capital Staying Put with Finova Proposal

STAMFORD, CT-GE Capital Corp., will apparently stand put with its $7-billion financing proposal to Finova Group, despite news that rival Berkadia LLC has sweetened its offer for control of the bankrupt financial services firm.

By John Jordan | Updated on June 04, 2001

STAMFORD, CT-A revised offer from rival Berkadia LLC, a joint venture of Berkshire Hathaway Inc. and Leucadia National Corp., has not caused GE Capital Corp. to sharpen its pencil on its offer to lend Finova Corp. approximately $7 billion. Finova filed for Chapter 11 bankruptcy protection in March and listed assets of $12.5 billion and liabilities of $11.4 billion. The company lost $75.7 million or $1.24 per share in the first quarter of this year.

In response to Berkadia LLC’s revised offer released on May 30, John Oliver, a spokesman for GE Capital tells GlobeSt.com, “We are continuing to work with Finova’s creditors and we believe we have reached a competitive arrangement and that is the state of play.” Oliver adds that the Finova creditors have signed a letter of intent for the GE Capital financing deal.

While specific details of the GE Capital plan, in partnership with Goldman Sachs, have not been released, officials involved in the deal note that GE Capital/Goldman Sachs would provide Finova with approximately $7 billion of liquidity. The plan must meet the approval of the Delaware Bankruptcy Court. While GE Capital has a signed letter of intent with Finova’s creditors, the Berkadia venture has the backing of Finova’s management.

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